Car Loan Calculator Canada: Payments with Sales Tax and Trade-In

This car loan calculator estimates the monthly payment, total interest and overall cost of financing a vehicle in Canada. It takes the vehicle price, your down payment, any trade-in, the interest rate, the loan term and your province’s sales tax, so you can see what the car will cost before you visit a dealership. It is one of the calculators in the personal loans, lines of credit and car loans hub.

How This Car Loan Calculator Works

Enter the vehicle price, your down payment, any trade-in value, the interest rate, the loan term and your province. The calculator shows the monthly and bi-weekly payment with a breakdown of sales tax, total interest and the total paid over the loan.

Inputs:

• Vehicle price: the sticker price or the negotiated purchase price
• Down payment: cash paid upfront to reduce the loan amount
• Trade-in value: the value of your current vehicle applied to the purchase (it also reduces the taxable amount in some provinces)
• Interest rate: the annual percentage rate your lender offers
• Loan term: the number of months to repay (36 to 96)
• Province: sets the sales tax rate (GST, HST, or GST plus PST)

What Rate to Enter

Car loan rates depend mostly on your credit score, whether the car is new or used, and the lender. Expected rates by credit score and lender type are on the car loan rates page; a pre-approval from your bank or credit union gives you an actual rate to enter.

Sales Tax and Trade-Ins

The calculator applies your province’s sales tax to the price. Rates by province, and how used and private-sale vehicles are taxed, are in sales tax on a car in Canada. When a dealer accepts your used vehicle, or other used goods, as full or partial payment, the GST or HST is charged on the price minus the amount the dealer credits you for the trade-in, as long as you aren't required to collect GST/HST on the trade-in yourself, as a registrant trading in a business asset would be. For example, in Ontario, if you buy a $40,000 car and trade in a vehicle worth $10,000, you pay HST on $30,000.

How the Term Changes the Cost

A longer term lowers the monthly payment and raises the total interest; it also raises the chance of owing more than the car is worth partway through the loan (negative equity).

How much car fits your budget, including the 20/4/10 rule and the running costs on top of the payment, is covered in how much to spend on a car. Whether to lease instead is covered in leasing vs buying a car, with a lease vs buy calculator for the numbers.

What Affects Your Car Loan Rate

1. Your credit report. Errors on your Equifax or TransUnion report can lower your score; a correction can raise it.
2. Pre-approval. Quotes from your bank, a credit union and an online lender give you a rate to compare with the dealer’s; the steps are in how to finance a car in Canada.
3. Negotiating the price first. Agreeing on the purchase price before talking about monthly payments keeps the real cost visible.
4. A larger down payment. It means a smaller loan and sometimes a better rate.
5. A shorter term. Some lenders charge less for shorter terms.
6. Credit unions. They often quote car loan rates under the big banks'.

Reducing the Interest on a Car Loan

• Bi-weekly payments. Paying half the monthly payment every two weeks makes 26 half-payments a year, the equivalent of 13 monthly payments instead of 12, which shortens the loan and cuts the interest.
• Lump-sum payments. Putting a tax refund or bonus toward the principal reduces the interest on the rest of the loan, if the loan allows prepayment without a penalty.
• Refinancing. If rates fall or your credit improves, refinancing a car loan at a lower rate can save thousands.

To fit the payment into a wider plan, the budget calculator shows it alongside other spending, the salary calculator works out take-home pay, and the debt payoff calculator compares paying the loan down faster with other debts.